Cities Where Incomes Are Shrinking the Fastest

Total personal income in the United States climbed for the third consecutive year in 2016. Nationwide, the total amount Americans took home rose 1.1% — from $14.2 trillion in 2015 to $14.4 trillion in 2016. Factoring in population growth over the same period, per capita income inched up by a relatively modest 0.4%, and now stands at $44,450.

Per capita income growth was generally strongest in and around major American cities. However, there were several exceptions. In a number of metro areas, per capita income fell considerably in 2016.

Each metro area economy is unique, and a decline in income per capita in a certain area can be attributed to any number of causes. In some cities, the rapidly falling per capita income was the product of employment and wage declines in major industries — and often symptomatic of broader economic trouble.

In other cities, a dip in per capita income is simply the result of population growth outpacing income growth — and not necessarily an indication of economic decline.

24/7 Wall St. reviewed one-year changes in per capita income in U.S. metro areas to identify the cities where incomes are shrinking the fastest. Per capita income is total personal income divided by the population. The declines in 2016 in per capita income range from 2.2% to 8.8%.

After climbing for six consecutive years, per capita income fell by 2.2% in the Mankato metro area in 2016. The last time per capita income dipped in the area was from 2008 to 2009, in the midst of the Great Recession. Despite the dip in 2016, Mankato’s income per capita of $43,319 is 6% higher than it was half a decade prior.

While income growth is lagging, the metro area’s job market remains strong. Just 2.4% of workers in the area are out of a job, the lowest unemployment rate of any Minnesota metro area and well below the May national unemployment rate of 3.8%.

Source: picturist / Getty Images

24. New Orleans-Metairie, LA> Per capita income growth in 2016: -2.2%> 5 yr. per capita income growth: 7.7%> Per capita income: $44,979> May 2018 unemployment: 4.5%

The total income of all workers in the New Orleans-Metairie metro area was 1.6% lower in 2016 than in 2015, even as the population increased by 0.5% over the same period. On a per capita basis, income fell by 2.2% from about $46,000 in 2015 to $45,000 in 2016. The metro area’s economy is heavily dependent on tourism — and income in the region fell despite a record 10.5 million visitors who spent some $7.4 billion in 2016.

The decline in per capita income in New Orleans is likely partially attributable to the oil industry. Oil and gas extraction and related fields account for a larger than typical share of employment and income in the metro area, and oil prices plummeted in both 2014 and 2015, hitting lows not seen in well over a decade in 2016. Total wages in the oil and gas extraction industry in New Orleans fell by 16.7% that year.

The Denver metro area population grew by 1.4% in 2016, nearly three times the national population growth of 0.5% over the same period. Overall income did not climb commensurately, however. Per capita income in the Denver metro area was $48,728 in 2016, down 2.2% from the year before. Despite the dip, longer-term income growth in the area has been far faster than average. Over the last half decade, per capita income rose by 12.6% in the metro area — a greater increase than in the majority of cities and the 9.0% national average.

Long term income growth has likely contributed to the relative lack of financial hardship in the metro area. Denver’s 9.4% poverty rate is among the lowest of U.S. metro areas and well below the 14.0% U.S. poverty rate.

Source: John Tufts / Wikimedia Commons

22. San Angelo, TX> Per capita income growth in 2016: -2.3%> 5 yr. per capita income growth: 2.5%> Per capita income: $41,582> May 2018 unemployment: 3.2%

Per capita income in the San Angelo metro area fell for the second consecutive year in 2016 to $41,582 from $42,547 in 2015. The 2.3% decline was among the largest of any U.S. metro area. For reference, per capita income climbed 0.4% nationwide over the same period.

Like many other metro areas on this list, oil and gas extraction accounts for a larger than typical share of employment and wages in San Angelo. Plummeting oil prices in 2015 and 2016 likely largely explain the fall in per capita income in the area. Employment in the industry fell by 8.2% in 2016 and total wages in the industry fell by 7.8%.

Naples-Immokalee-Marco Island is one of the fastest growing metro areas in the country. The metro area’s population increased by 2.2% from 2015 to 2016, more than four time the national population growth of 0.5% over that time. Income growth has not kept pace, however. Over the same period, total income remained flat and per capita income fell by 2.3%. This may be largely due to a rapidly growing retired population as the number of area residents 65 and older increased by 4.9% in 2016, faster than the comparable 4.7% national increase.

Despite the decline in per capita income, the area remains among the highest earning in the country. Per capita income in the Naples metro area is $75,635, about $31,200 more than per capita income nationwide.